Hooper Holmes (HH) 8-K/A Consolidated Financial Statements and Report of Independent Certified Public Accountants

Exhibit 99.1

Consolidated Financial Statements and Reportof Independent Certified Public Accountants

Accountable Health, Inc.

December 31, 2014 and 2013

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Accountable Health, Inc.

Contents

Report of Independent Certified Public Accountants    3–4

Consolidated Financial Statements

Consolidated Balance Sheets    5

Consolidated Statements of Operations    6

Consolidated Statements of Changes in Shareholders’ Equity    7

Consolidated Statements of Cash Flows    8

Notes to the Consolidated Financial Statements    9–22

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors

Accountable Health, Inc.

We have audited the accompanying consolidated financial statements of Accountable Health Inc. (a Delaware corporation) and its subsidiary, Accountable Health Solutions, which comprises the consolidated balance sheets as of December 31, 2014 and 2013, and the related consolidated statements of operations, changes in shareholders’ equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Accountable Health, Inc. and subsidiary as of December 31, 2014 and 2013, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

/s/ Grant Thornton LLP

McLean, Virginia

May 21, 2015

4

Accountable Health, Inc.

Consolidated Balance Sheets

(Amounts in Thousands, except share and per share information)

December 31,		2014		2013
Assets
Current Assets
Cash and cash equivalents	$	1,426	$	4,105
Receivables from clients, net		1,347		1,451
Inventory		1,654		1,727
Prepaid expenses		234		208
Other current assets		256		1,180
Total Current Assets		4,917		8,670
Non-Current Assets
Restricted cash		1,077		1,073
Property and equipment, net		2,674		2,486
Intangible assets		5,081		8,959
Goodwill		3,872		3,872
Other long term investments		513		500
Total Assets	$	18,134	$	25,560
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	827	$	157
Accrued expenses		433		757
Deferred revenue		271		302
Accrued salaries and related benefits		688		1,893
Total Current Liabilities		2,219		3,108
Non-Current Liabilities
Deferred tax liabilities		1,976		3,485
Deferred rent		1,235		922
Total Liabilities		5,430		7,515
Commitments and Contingencies		—		—
Shareholders’ Equity
Preferred shares - $.01 par value, 1,100,000
shares issued and authorized		11		11
Common shares, voting - $.01 par value, 1,100,000
shares issued and 3,000,000 authorized		11		11
Additional paid-in capital		26,937		24,937
Retained deficit		(14,255)		(6,914)
Total Shareholders’ Equity		12,704		18,045
Total Liabilities and Shareholders’ Equity	$	18,134	$	25,560

The accompanying notes are an integral part of these consolidated financial statements.

5

Accountable Health, Inc.

Consolidated Statements of Operations

(Amounts in Thousands)

Years ended December 31,		2014		2013
Revenues
Service revenue	$	15,512	$	6,359
Total Revenues		15,512		6,359
Operating Expenses
Salaries and benefits		8,675		6,181
Transition services agreement		672		799
External screening and coaching costs		4,833		1,581
Commissions and broker fees		604		406
Facilities costs		1,089		638
Depreciation and amortization		2,628		1,228
Impairment of intangibles		1,887		—
Other sales, general and administrative		3,977		2,837
Total Operating Expenses		24,365		13,670
Loss from Operations		(8,853)		(7,311)
Interest Income		4		10
Loss Before Income Taxes		(8,849)		(7,301)
Income Tax Benefit		1,508		387
Net Loss	$	(7,341)	$	(6,914)

The accompanying notes are an integral part of these consolidated financial statements.

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Accountable Health, Inc.

Consolidated Statements of Changes in Shareholders’ Equity

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013
				Voting				Additional				Total
	Preferred Shares			Common Shares				Paid-in		Retained		Shareholders’
	Shares	Amount		Shares	Amount			Capital		Deficit		Equity
Balance, January 1, 2013	—	$	—	—	$	—	$	—	$	—	$	—
Issuance of stock	1,100,000		11	1,100,000		11		14,978		—		15,000
Contribution of Principal Wellness Group	—		—	—		—		9,959		—		9,959
Net loss	—		—	—		—		—		(6,914)		(6,914)
Balance, December 31, 2013	1,100,000		11	1,100,000		11		24,937		(6,914)		18,045
Contribution of Principal Wellness Group	—		—	—		—		2,000		—		2,000
Net loss	—		—	—		—		—		(7,341)		(7,341)
Balance, December 31, 2014	1,100,000	$	11	1,100,000	$	11	$	26,937	$	(14,255)	$	12,704

The accompanying notes are an integral part of these consolidated financial statements.

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Accountable Health, Inc.

Consolidated Statements of Cash Flows

(Amounts in Thousands)

Years ended December 31,		2014		2013
Cash Flows from Operating Activities
Net loss	$	(7,341)	$	(6,914)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization		2,627		1,228
Impairment of intangibles		1,887		—
Allowance for doubtful accounts, net		37		36
Deferred tax benefit		(1,508)		(387)
Changes in assets and liabilities:
Receivables from clients		67		(565)
Inventory		73		(1,663)
Other assets		898		(1,362)
Accounts payable		670		157
Accrued salaries and related benefits		(1,205)		924
Deferred revenue		(31)		302
Deferred rent		313		922
Restricted cash held in certificate of deposit		(4)		(1,073)
Other accrued liabilities		(324)		656
Net Cash Used in Operating Activities		(3,841)		(7,740)
Cash Flows from Investing Activities
Acquisition of property and equipment		(825)		(2,655)
Purchase of investments		(13)		(500)
Net Cash Used in Investing Activities		(838)		(3,155)
Cash Flows from Financing Activities
Equity contributions		2,000		15,000
Net Cash Provided by Financing Activities		2,000		15,000
Net (Decrease) Increase in Cash and Cash Equivalents		(2,679)		4,105
Cash and Cash Equivalents, beginning of period		4,105		—
Cash and Cash Equivalents, end of period	$	1,426	$	4,105

The accompanying notes are an integral part of these consolidated financial statements.

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Accountable Health, Inc.

Notes to Consolidated Financial Statements

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Accountable Health, Inc. (the “Company”), invests in and acquires technology-enabled healthcare service companies that increase efficiencies, improve quality and reduce costs in the delivery of healthcare. The Company is headquartered in the state of Maryland and operates in various states throughout the United States. The Company began operations in January 2013.

New trends in the U.S. healthcare market are transforming the landscape and the way healthcare is delivered. From the new federal Patient Protection and Affordable Care Act, to changes in demographics, to new technologies, medical services and pharmaceuticals, opportunities abound for companies to deliver innovative solutions to the healthcare industry. With varying investment options, Accountable Health is an ideal partner to build these visionary companies into market-leading enterprises.

In July 2013, The Principal Financial Group® (“PFG”) contributed 100% of the equity of the Principal Wellness Company (“PWC”) as part of a larger investment in the Company. PWC was subsequently rebranded to Accountable Health Solutions (“AHS”). AHS collaborates with its clients to design effective and participant friendly health and wellness solutions tailored to meet client needs and to integrate health and wellness into the workplace culture. AHS’ goal is to help the healthy population stay healthy, while delivering programs and interventions to help the high-risk population improve their health. AHS’ programs are supported by effective member engagement strategies, measurable results and ongoing consultation to ensure the long-term success of wellness initiatives.

Basis of Presentation

The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Outlined below are those policies considered particularly significant.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued

Revenue Recognition

The Company recognizes revenue from services provided to its clients, consisting primarily of self-funded employer groups. These services fall into one of three groups: Year Round Wellness; Screening Services and Health Coaching. The Company recognizes revenue from Screening and Health Coaching services as services are provided to their clients and bills for these services one month in arrears. Revenue from Year Round Wellness services are recognized on a per-month, per-participant basis as services are provided and are billed during the month in which services are rendered.

Revenue is accrued for services that have been provided and not yet billed. The Company also records any billings in excess of revenue recognized as deferred revenue until all of the revenue recognition criteria have been met.

Receivables from Clients, Unbilled Services and Allowances

The Company records its client receivables and unbilled services at their face amounts less allowances. On a periodic basis, the Company evaluates its receivables and establishes allowances based on the specific identification of expected uncollectible receivables. Unbilled services are not evaluated with receivables as they are consistently billed within one month. As of December 31, 2014 and 2013, the total allowance recorded for receivables from clients was $51 and $36, respectively. The allowance reflects the Company’s best estimate of collectability risks on outstanding receivable. Payment terms for services vary by contract, but generally payment for services is contractually due within 30 days.

The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, each customer’s payment history, and the customer’s current ability to pay its obligation to the Company. The Company writes off receivables from clients when they become uncollectible.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value because of the short term maturity of these items.

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued

Concentrations of Credit Risk

The Company’s financial instruments, consisting primarily of cash and cash equivalents, client receivables and unbilled services, are exposed to concentrations of credit risk. The Company places its cash and cash equivalents with highly-rated financial institutions, limits the amount of credit exposure with any one financial institution and conducts ongoing evaluation of the credit worthiness of the financial institutions with which it does business. Client receivables are concentrated with employer groups and are dispersed across a large number of clients. At December 31, 2014, two clients constituted receivable balances of 25% and 15%, respectively. In addition, two clients constituted 17% and 11% of total revenues, respectively. At December 31, 2013, one client constituted 40% of receivables from clients and 11% of total revenues.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Substantially all of the Company’s bank deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). During the normal course of business, the Company’s cash deposits may exceed the federally insured limit. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Restricted Cash

Pursuant to its lease agreement for the Rockville office space, the Company is required to maintain a security deposit in the amount of $1,100. The Company maintains this security deposit via a letter of credit which is collateralized with a certificate of deposit in the same amount. Under the terms of the lease agreement, the required security deposit will be reduced by one-third at the end of the second, third, and fourth lease year, subject to a minimum security deposit equal to one month’s base rent. As of December 31, 2014 and 2013, there have been no amounts drawn on the letter of credit.

Inventory

The Company’s inventory consists of diabetic and biometric screening supplies. Inventories are stated at the lower of cost and net realizable value. The Company uses the FIFO method.

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—Continued

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation and amortization, and consists primarily of leasehold improvements and furniture and equipment. Depreciation is computed on a straight-line basis over the asset’s estimated service lives ranging from three to five years. Leasehold improvements are amortized over the lives of the respective leases or the service lives of the improvements, whichever are shorter, using the straight-line method.

Other Long Term Investments

The Company holds a 2.98% and 3.29% interest in CareCam at December 31, 2014 and 2013, respectively; a health care technology company that creates a strong interface between the patient and provider to drive appropriate care, compliance, and outcomes. The Company accounts for this investment under the cost method and determined that there was no permanent change in the investment value as of December 31, 2014 and 2013.

Deferred Rent

The Company recognizes lease expense on its operating leases using the straight-line method over the life of the leases. Deferred rent consists of rent abatements and rent escalations which are considered in the determination of straight-line rent expense for operating leases. Lease incentives are recorded as a deferred credit and recognized as a reduction to rent expense on a straight-line basis over the lease term.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus or minus deferred taxes. Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities, using current tax rates. The difference between the financial statement and the tax basis of assets and liabilities is primarily caused by differences in depreciation, intangible assets, recognizing income for tax purposes that is deferred for financial reporting and recognizing certain compensation and other expenses for financial reporting that are deferred for income tax purposes. The deferred tax assets and liabilities represent the estimated future tax consequences of those differences.

The Company recognizes the financial statement benefit of an income tax position only after determining that the relevant taxing authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. The Company applies the uncertain tax position guidance to all tax positions in the tax returns filed, as well as any un-filed tax positions. The Company has chosen to treat

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

interest and penalties related to unrecognized tax benefits as income tax expense and as an increase to the income tax liability. There were no uncertain tax benefits recorded at December 31, 2014 and 2013.

As of December 31, 2014, tax years subject to examination include 2012 through 2014 for the Company and 2010 through 2013 for PWC.

The Company is subject to income taxes in certain state and local jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply.

Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If the assets are impaired, the impairment recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets. Fair value is generally determined by estimates of future cash flows. An impairment of $1,887 was recorded for the year ended December 31, 2014 due to the termination of several large clients and the resulting expected decline in expected cash flow from those relationships.

Goodwill

Goodwill and the corresponding deferred tax liability resulted from the excess of the fair value of contributed intangible assets received from PFG in connection with the contribution of PWC. The amortization of the customer portal and customer relationships is not deductible for income tax purposes.

The Company performs an annual goodwill impairment review. For the purposes of performing this review, the Company has concluded that it has one reporting unit. The Company opted to perform a two- step assessment to test if goodwill was impaired. The Company considered and evaluated each of the three traditional approaches to value: the income approach, the market approach, and the asset approach. The Company relied on the income approach to value given the small size of the Company relative to publicly-traded guideline companies. However, the Company also performed a market approach based on the multiple of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) paid to acquire AHS in 2013. The analysis yielded a higher value than the income approach analysis.

Given the threshold nature of the Step 1 goodwill impairment test, the Company elected to rely on the lower income approach value to be conservative. The Company employed the discounted cash flow method within the income approach. In this method, the present values of cash flows reasonably expected to be produced from its operations were summed to produce an estimate of the Company’s business enterprise value on a marketable-control basis. The income approach analysis resulted in an estimated

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

value for the equity in excess of the carrying amount. Therefore, management asserted that no impairment exists.

Using Estimates in Preparing Financial Statements

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions affecting the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reporting period. Actual results could differ from those estimates.

In the ordinary course of accounting for estimates such as the allowance for doubtful accounts, the Company makes changes in estimates as appropriate, and as it becomes aware of circumstances surrounding those estimates. Such changes and refinements in estimation methodologies are reflected in reported results of operations in the period in which the changes are made and, if material, their effects are disclosed in the notes to the financial statements.

NOTE B—CONTRIBUTION OF PRINCIPAL WELLNESS COMPANY

In 2013, the Company received $10,000 in cash, 100% of the equity of the Principle Wellness Company (“PWC”), and a commitment to fund up to $5,000 of the future losses of PWC in exchange for 1,100,000 shares of its preferred stock (representing an as-if converted 50% equity interest in the Company). The fair value of PWC was determined by the Company, with the assistance of a third-party valuation firm, to be $9,959. The table below summarizes the allocation of the fair values of assets acquired and liabilities received on the contribution.

Net tangible assets	$	5
Customer portal		4,116
Customer relationships		5,838
Goodwill		3,872
Deferred tax liability		(3,872)
Total fair value on date of contribution	$	9,959

The results of PWC have been included in the consolidated financial statements since July 1, 2013, the date of contribution.

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

NOTE B—CONTRIBUTION OF PRINCIPAL WELLNESS COMPANY—Continued

The overall enterprise value of PWC was determined based on the present value of future net cash flows utilizing an estimate of the appropriate discount rate, which is consistent with the uncertainties of the cash flows utilized. The fair value measurements are based on significant unobservable inputs that were developed by the Company using publicly available information; market participant assumptions; cost and development assumptions; expected synergies and other cost savings that a market participant would be expected to realize as a result of the combination; and certain other high-level assumptions.

The majority of the assets acquired consisted of intangible assets relating to its customer portal and customer relationships. The Company utilized the cost approach to value both the customer portal and customer relationships. The cost approach is based on the premise that a prudent investor would not pay more than the cost to replace or reproduce the asset.

The customer portal and relationships are amortized over their estimated useful life of five years on a straight-line basis. Impairment charges of $1,887 related to customer relationships were recorded in 2014.

The Company also recorded $3,872 in goodwill and corresponding deferred tax liability resulting from the excess of fair value of the intangible assets received over their tax (historic cost) basis. Neither the amortization of the intangible assets or the goodwill is expected to be deductible for U.S. federal or state income tax purposes.

NOTE C—RECEIVABLES FROM CLIENTS, NET

Receivables from clients consist of the following at December 31:

	2014		2013
Billed	$	1,045	$	1,215
Unbilled		353		272
		1,398		1,487
Less: allowance for doubtful accounts		(51)		(36)
	$	1,347	$	1,451

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

NOTE D—PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31:

	2014		2013
Leasehold Improvements	$	1,771	$	1,369
Furniture and Equipment		1,355		1,181
Computer Hardware		268		64
Computer Software		105		49
Fixed Assets in Progress		-		56
		3,499		2,719
Less: accumulated depreciation		(825)		(233)
	$	2,674	$	2,486

Depreciation expense included in selling, general and administrative, for the year ended December 31, 2014 and 2013 was $637 and $233, respectively.

NOTE E—STOCK APPRECIATION RIGHTS

The Company created a Stock Appreciation Rights (“SARs”) Plan, which grants eligible employees units equivalent to one share of common stock in the Company. The SARs Plan is administered in accordance with Section 409A of the Internal Revenue Code of 1986. Each grant accrues over a five-year period and SARs units do not represent equity in the Company.

The awarded SARs are not eligible for payout until the Company undergoes a sale of substantially all of its assets; the sale of 50% of the issued and outstanding common shares; or a merger transaction whereby the Company is merged into a surviving company, provided all other service provisions have been satisfied. As such, compensation expense has not been recognized on any grants to date as management has concluded that it is not probable that the aforementioned performance criteria will be met.

The Company granted 345,000 SARs during 2013 and 50,000 SARs in 2014. In 2014, 20,000 SARs were forfeited.

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

NOTE F—INTANGIBLE ASSETS

Intangible assets consist of the following at December 31:

		2014			2013
Customer portal	5 year life	$	4,116	$		4,116
Customer relationships	5 year life		5,838			5,838
			9,954			9,954
Less: accumulated amortization			(2,986)			(995)
Less: impairment of intangibles			(1,887)			-
		$	5,081	$		8,959
Estimated future amortization expense:
2015				$		1,452
2016				$		1,452
2017				$		1,452
2018				$		725

As a result of the book-tax basis differences generated on the date of contribution and the amortization not being deductible for tax purposes, the Company recorded $3,872 of goodwill and a corresponding deferred tax liability. Amortization of these definite lived intangibles will cause a deferred tax benefit that fully reduces the deferred tax liability over the amortization term.

NOTE G—EMPLOYEE BENEFIT PLAN

The Company maintains a defined contribution plan covering all employees meeting certain eligibility requirements. The plan allows eligible employees to defer a percentage of their compensation as contributions, subject to statutory limitations. The Company matches employee contributions at the rate of 100% for the first $1, and then at a percentage determined at the sole discretion of the Company up to a maximum of $4. The Company match is vested ratably over a five-year period based on years of

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

service. Contribution expense for the years ended December 31, 2014 and 2013 amounted to $236 and $151, respectively.

NOTE H—COMMITMENTS

Rental Space and Equipment Leases

The Company leases office space for its headquarters in Rockville, MD, and satellite offices in Des Moines, IA and Indianapolis, IN which expire in January 2024, August 2018, and April 2018, respectively.

Total rent expense for all operating leases amounted to approximately $723 and $465 for the years ended December 31, 2014 and 2013, respectively. Future minimum lease payments for non-cancelable operating leases for each of the years ending December 31 are as follows:

Year ended December 31,
2015	$	805
2016		845
2017		852
2018		689
2019		487
Thereafter		2,131
	$	5,809

NOTE I—RELATED-PARTY TRANSACTIONS

The Company provides wellness services to PFG, one of its primary shareholders. The contract governing these services was in existence on the date the Company acquired Accountable Health Solutions. During 2014 and 2013, the Company recognized $853 and $133, respectively in revenue from services provided to PFG. No amounts were due at December 31, 2014 or 2013.

In conjunction with PFG’s contribution of the AHS business to the Company, AHS and the Company entered into a 24-month Transition Services Agreement with PFG. Under the terms of the agreement, PFG will provide information technology, call center and other back office support services to AHS for a period of up to 24-months. AHS may discontinue any and all services with PFG at any time. In 2014

18

Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

and 2013, the Company incurred $672 and $799, respectively in expense related to this agreement. As of December 31, 2014 and 2013, the Company had a liability related to this agreement of approximately $64 and $160, respectively.

NOTE J— SHAREHOLDERS’ EQUITY

On October 16, 2013, the Company's certificate of incorporation was amended to increase the number of authorized shares available for issue from 2,050 to 4,100,000 and to effect a twenty-for-one stock split of its common and preferred stock. All share and per share data presented herein reflect the impact of the increase in authorized shares and the stock split, as appropriate.

Preferred Stock

The Company is authorized to issue 1,100,000 preferred shares with a par value of $0.01. The preferred shares possess no voting rights. The holders of preferred shares shall have the right, but not the obligation, to convert preferred shares to common shares on a “one-to-one” basis. In the event that the Board of Directors of the Company declares a dividend payable upon the then outstanding common stock of the Company, the holders of the preferred stock shall be entitled to the amount of dividends declared payable on the number of shares of common stock into which the preferred stock could be converted. All issued and outstanding shares of preferred stock automatically convert into common stock upon the occurrence of certain events. The preferred stock has a liquidation preference that entitles the holders to a distribution on dissolution of liquidation of the Company of up to $10,000 prior to any distribution to the common stockholders.

During 2013, the Company issued 1,100,000 shares of preferred stock in exchange for a combination of $10,000, 100% of the equity interests of PWC and a commitment to fund up to $5,000 of future losses of PWC incurred during the first twenty-four months post contribution. Of this $5,000 commitment, PFG contributed $3,000 in fiscal year 2013 and the remainder in 2014.

Common Stock

The Company is authorized to issue 3,000,000 shares of common stock with a par value of $0.01 per share. Each share of common stock entitles the holder to one vote.

During 2013, the Company issued 1,100,000 shares of common stock for $2,000.

19

Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

NOTE K—INCOME TAXES

The components of income tax expense (benefit) are as follows at December 31:

	2014		2013
Deferred expense benefit:
Federal	$	(1,318)	$	(338)
State		(190)		(49)
Total income tax benefit	$	(1,508)	$	(387)

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

At December 31, the Company’s gross deferred tax assets and liabilities were comprised of the following:

	2014		2013
Deferred tax assets:
Current
Contribution limitations	$	11	$	11
Accruals and reserves		122		371
UNICAP		111		-
		244		382
Less: Valuation allowance		(239)		(360)
Total current deferred tax asset		5		22
Noncurrent
Net operating loss		3,445		2,241
		3,445		2,241
Less: Valuation allowance		(3,390)		(2,082)
Total noncurrent deferred tax asset		55		159
Deferred tax liabilities:
Identified definite lived intangibles		(1,976)		(3,485)
Compensation accruals		(55)		(159)
Depreciation expense		(5)		(22)
Net deferred tax liability	$	(1,976)	$	(3,485)

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Accountable Health, Inc.

Notes to Consolidated Financial Statements—Continued

(Amounts in Thousands, except per share information)

For the years ended December 31, 2014 and 2013

NOTE K—INCOME TAXES—Continued

The difference between income tax expense derived by applying the statutory tax rates to the current year's net loss and the actual tax expense recorded is due to the Company providing a full valuation allowance against deferred tax assets for current and accumulated net operating losses.

As of December 31, 2014, the Company had federal net operating loss carryforwards of $10,100, with which to offset the Company's future taxable income. The net operating loss carryforwards will expire starting 2033 if not utilized.

As of December 31, 2013, the Company had federal net operating loss carryforwards of $5,700 with which to offset the Company's future taxable income. The net operating loss carryforwards will expire starting 2033 if not utilized.

NOTE L—SUBSEQUENT EVENTS

On April 17, 2015, Accountable Health, Inc. sold the wellness business assets of Accountable Health Solutions, Inc. to Hooper Holmes, Inc. for $4,000 cash and 6.5 million shares of Hooper Holmes unregistered common stock (“NYSE: HH”). As part of the transaction, Accountable Health Solutions, Inc. changed its name to Health Improvement Connections, Inc. Certain assets and liabilities related to chronic care management business was retained by Accountable Health, Inc.  In the transaction, Accountable Health, Inc. will provide certain transition services to Hooper Holmes, Inc. 

Since the large majority of the wellness business was sold, the Company anticipates the sale will have a material impact on the revenues and financial statements for 2015 and future years.

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